Eastern Cape Business 2017 edition

SPECIAL FEATURE
Special Economic Zones
New sectors such as renewable energy and aquaculture are attracting investors to the
Eastern Cape’s Industrial Development Zones.
South Africa is investing in SEZs as a major
plank of its industrial development policy.
The aim is to attract new skills and develop
new industries. The Eastern Cape has two
such zones, the East London Industrial Development
Zone (supported by the Port of East London)
and the Coega Industrial Development Zone (at the
Port of Ngqura in the Nelson Mandela Metropolitan
Municipality).
Key goals behind the establishment of SEZs are:
• to encourage industries to develop in clusters,
leading to economies of scale, skills-sharing and
easier access for suppliers
• to create industrial infrastructure to promote
investment
• to promote cooperation between the public and
private sectors
• to use the zones as a launching pad for other
developments.
Special Economic Zones are created in terms
of the Special Economic Zones Act of 2014 (Act 16
of 2014). The act defines an SEZ as “geographically
designated areas of the country that are set aside for
specifically targeted economic activities, and supported
through special arrangements and systems
that are often different from those that apply to the
rest of the country”.
As of 2015/16, the regulatory framework began
to change for existing Industrial Development
Zones such as those that at East London (ELIDZ)
and Coega (CIDZ). There will be a three-year transition
period to SEZ status that will include SEZspecific
tax incentives and the introduction of
one-stop-shops for state services. The cumulative
effect should be to boost the attractiveness of
SEZs to foreign investors.
Apart from attracting foreign direct investment
(FDI) and boosting employment, SEZs can play a
role in helping to add new sectors or sub-sectors
to an economy.
For the Eastern Cape’s two industrial parks, this
has already started to happen with investors in
EASTERN CAPE BUSINESS 2017
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